HSBC, one of the largest banks in Europe informed financial market on Monday that the institution would still remain in Britain, contrary to the idea of moving to Hong Kong because of United Kingdom’s increased regulation. – London (AFP)
In a note to the London Stock Exchange on Sunday, The Hong Kong and Shanghai banking Corporation said the board seen that London really has more advantages and ideals for being a home base for the institution.
“Considering a main office in UK and major business in Asia Pacific, we’re able to give our clients or stakeholders the best of both worlds,” says group chairman Douglas Flint to BBC radio.
The bank review on where to put their head office began in April last year, prior to British general election in the midst of rising crackdown calls on sectors found by some voters as incompetent.
According to British finance ministry, the decision was “a vote of confidence in the government’s economic plan and a boost to our goal of making the UK a great place to do more business with China and the rest of Asia”.
‘Big vote of confidence’
Although the review apparently considered Germany and United States, the final option had been between Britain and Hong Kong.
Since bank stocks have been through a lot of struggle and still coping with ambiguity from a referendum on Britain’s EU membership this year, the decision can be very helpful for the City.
In the bank statement, it says; “London is one of the world’s leading international financial centers and home to a large pool of highly skilled, international talent.” Therefore, it is really apt for being the home base for global financial institution like HSBC.
The decision is a big vote of confidence in UK, said British banking Association spokesman.
With HSBC share price rose 1.27 percent at the start of trading to 446 pence as well as the rising of the bank’s Hong Kong-listed stocks by more than four percent at closing, investors cheered the news.
But Confederation of British Industry’s director-general Carolyn Fairbairn said, “We cannot afford to be at ease about the contribution banking makes to the British economy, a sector that employs over half a million people”. She also said that banks were indeed critical for the British company.
Frances Lun of Geo Securities said the headquarters review had been designed to put pressure on the UK government over regulations. He told AFP that multinationals really do this for a century, to win concessions from the government since they are key players and contributors to GDP.
Since 1992, HSBC was already situated in Britain after it took over Midland Bank and moved its head office from Hong Kong to London.